W. T. Baxter
Professor of Accounting, London School of Economics and Political Science.
(Extract from: Studies in the History of Accounting, Littleton & Yamey, 1956)
Most people who have lived in a snail country town can still remember cases of “‘ book-keeping barter.”’ Perhaps for instance the dairy-farmer sent milk each day to the tailor. The latter did not bother—and was hardly expected—to pay cash, but ran up his account indefinitely.
Then, when the farmer needed a new suit, he ordered it from the tailor. With luck the two sets of sales would more or less cancel over the years, so that both men avoided the distasteful task of settling accounts by paying money. This modified version of barter seems to have been the essence of much colonial trade, to judge from surviving account-books.
BARTER
In the eighteenth century, barter was still practised to some extent in Britain [2]; in America, it was very common. For this there were several reasons. First, each community was small in numbers; and,if a market consists of few dealers, the chances are high that A will both sell to and buy from B—particularly as both men may be somewhat unspecialised and so have a wide range of wares on offer. Second, money was scarce and bad.[3] Britain would not let the colonies make” their Own coins; and any British coins that reached America were soon sent home again to pay for much-needed manufactures. So, though the colonists calculated and bargained in terms of pounds, shillings, and pence, these were somewhat abstract moneys of account rather than real coins; their nearest equivalents today are perhaps the “‘ guineas”? that generous British donors send to charities, or the ‘bits’ that sometimes crop up in American speech. When hard money was in fact available, it was likely to consist of a motley collection of foreign coins, such as Spanish dollars, which the colonists gained by trade with the West Indies. The dollar, worth 4s. 6d. in sterling, was declared by each colony to be worth such-and-such a number of its own imaginary shillings (for example, Massachusetts at one stage valued a dollar at six local shillings).
The colony that put the biggest value on the dollar hoped to attract most coins to its ports; they argued that this kind of inflation would lure silver from Spaniards, pirates, and other holders of dollars. But the inflow of coins proved erratic. Moreover they were often light-weight and mutilated; their sizes did not make up a convenient range of values; and in any case they seldom circulated in a colony for more than six months before they too were exported to pay British debts.
In an attempt to make good the shortage of coins, the colonists issued various kinds of paper money. Their schemes were apt to be ingenious rather than sound. In Virginia “‘ tobacco notes” were based on tobacco in warehouses. In Massachusetts, groups of private persons formed a “land bank” and a “silver bank” to emit notes. The provincial government might issue notes—with no special backing, but with a promise that they would be accepted in payment of tax. These flows of paper sometimes led to inflation, and widened the disparity between the money-units of the different colonies.
Under such handicaps, even a rich and provident man was apt to be perennially short of sound money. He might look on coins not as the inevitable means of paying for commodities but as one of the commodities themselves—and one whose supply was exceptionally fickle. “* Bring all the money you can for it is scarce and in good demand ” wrote a Canadian settler in 1773.[4]
In these circumstances some form of barter was inevitable.
“Barter” is apt to call up mental pictures of a savage trying to swap a pig for a spear. Such an exchange, simple though it sounds, must in fact present awkward problems. The savage has to find a seller who
(a) owns a spear just equal in worth to the pig; and
(b) wants a pig on just that day.
The value of colonial accounts is that they show how men over- came these difficulties. Barter became plain sailing when traders could appraise goods in common terms, and still more when they could stretch the exchange over a long time. Money—even though it was too scarce to be always available as the unit of exchange— provided the common unit of value; and book-keeping gave the means for remembering and proving the details of a lengthy exchange. Thus the farmer of colonial New England was able to sell his pig in Boston for a money-credit in the storekeeper’s books; he could then take supplies as and when he wanted them, while the storekeeper charged up his account. If the farmer could also on occasion assign his credit to third persons—so that the storekeeper acted in effect as his bank— then barter became a tolerably flexible and efficient means of trading.
In discussing colonial trade we must evidently distinguish between what we may call:
(1) truck, i.e., the simultaneous exchange of goods; and
(2) book-keeping barter, i.e., an exchange with a time-lag.
Both types of barter appear to have flourished. The colonists were not much given to compiling statistics of their doings, and so a quantitative description of their different ways of trade is hard to come by. But one exceptional man did make and bequeath to us an analysis of his sales. He was Adam Stanton, who kept a general store at Clinton, Connecticut.
His surviving records [5] include pages ruled with columns in which he splits up his “sails’ for each week from 1796 to 1801. The columns are for:
“Truck” - presumably straightforward barter;
"Charged" — presumably credit sales, which might be paid for later either in cash or by book-keeping barter.
"Cash” — presumably cash sales.
His total for the three items averaged about £40 a week. little more than 10 per cent. of these sales were for truck, over 60 per cent. were charged, and under 30 per cent. were for cash.
Unfortunately, Stanton does not tell us what fraction of his charged sales was eventually paid for in cash and what by barter. This was a bit of information that could hardly be foreseen at the date of sale. Even a search through the accounts in many ledgers, long after they have been ruled off, does not yield satisfactory statistics on the point (mainly because the involved nature of some transactions defies analysis). But, as a rough guide to the quantities at stake, I would hazard a guess that about one-third of total indebtedness was dis-V charged in cash, and two-thirds by more roundabout means such as book-keeping barter.
The books of most traders seldom mention truck; men less fond than Stanton of statistics may have thought that crude barter called for no entries.
But Ninian Boog of Virginia kept a household expenses account, [6] which shows that much of his food was got by bartering wares from his store:
£ s. d.
To 1 dozen pipes for 1 dozen eggs 4
4 penknives 2s. 1 lace 9d. for 2 turkeys 2 9
1 quart rum for 4 chickens 1 3
and so on, at the rate of about twenty purchases a month. When the wares from the store did not quite balance the food received, a little cash was thrown in as the needed make-weight.
BOOK-KEEPING BARTER
If most traders did not trouble to mention truck in their accounts, they were at pains to record more sophisticated exchanges. Indeed, I fancy that the main purpose of colonial book-keeping was to lubricate barter.[7] Ledgers contained practically nothing save accounts for persons; apparently colonial merchants for the most part saw no point in keeping any other records. Further, these accounts cannot readily be divided between those of debtors and creditors. A modern firm can split up its personal accounts into two clear camps: its debtors (goods on the left, cash on the right), and its creditors (goods and cash the other way round). The colonial merchant bought from, and sold to, the same man, and so an account in his ledger might well have goods on both sides. Perhaps he could mentally distinguish between “suppliers” (often the British exporters who sent manufactures to him) and “ customers” (e.g., the smaller storekeepers of the villages); and it may be that he tended to be in debt to his suppliers, and that his customers were usually in debt to him—though a balance might well swing the other way after a large remittance in kind. Perhaps too he could divide goods into (i) those which it was his primary aim to handle, and (ii) those staples—beef, timber, tobacco, etc.—which passed more as commodity-money than as merchandise. [8]
The evidence on this point is overwhelming.
Though cash is mentioned in most accounts, its appearances tend to be erratic, belated, and inadequate. Innumerable accounts display a jumble of goods or services on both sides. An innkeeper charges his customer with “a bowl of toddy,”’ and credits “‘a bushel of rye” [9]; a black- smith charges for ploughing and gets back molasses [10]; and the accounts of a trader had to encompass not only his sober merchandise but also such items as “a little pig,” one day’s mowing,” “ writing a very long petition to the General Assembly,”’ “seven fowls to balance,”’ and the like.
Two personal accounts from Henchman’s ledger are given on pages 276 and 277); they have been slightly simplified and modernized. (See also Plate VIII for a reproduction of the first account.) The accounts are, respectively, for Captain John Gerrish, a Boston merchant, and Benjamin Horrocks, a Londoner. Gerrish’s account is mainly concerned with the fitting out of a joint-venture; the debits seem to be a mixture of genuine sales (of Henchman’s stationery) and of commodity-money and cash (perhaps transferred to Gerrish to finance the venture). The British agent is credited with supplies, freight, and interest; he is charged with bills, specie, and the proceeds of goods (such as whale-oil) consigned to him for sale in London.
 |
| VIII. A PERSONAL ACCOUNT IN DANIEL HENCHMAN’S LEDGER, 1730 (Courtesy of The Library, Harvard Business School.) |
As trade was so largely based on book-keeping barter, many people (including petty shopkeepers and farmers) had to keep accounts. What sort of system did they use?
The answer is clear. Everyone in business had some inkling of standard double entry, and took its form as his model; but remark- ably few seem to have had the skill—or felt the need—to push the system to anywhere near its full perfection. Crude single entry was overwhelmingly the rule. I have not come across any colonial ledger that is certainly complete.[12] In the great bulk of cases a trial balance was patently impossible, as most of the impersonal accounts are lacking, the personal accounts are not ruled off, and the work abounds in arithmetical slips and other blemishes. Some of the accounts may be in the currency of a sister province or of Britain, or a debit may be in £ s. d., and the credit in lbs. of tobacco.[13] Even in the rare cases where full and logical entries in a copper-plate journal hold out promise of completeness, the ledgers do not in fact fulfill this promise [14] —though the deficiency may conceivably be due to a book or pages having been lost.
There is, of course, nothing surprising about the colonists’ nodding acquaintance with the standard ledger. European textbooks were available to them; for example, Obadiah Brown of Providence, R.I., used one entitled A Guide to Book Keepers according to the Italian Manner (London, 1729); his copy has survived, with his diary when a ship’s captain written on its blank pages.[15] Further, the bigger firms had each one or more correspondents in Europe, whose frequent statements of account mirrored their ledgers. In some cases, a colonial merchant’s son was sent overseas for a spell of training in the correspondent’s counting-house. [16]
We can guess some of the reasons why colonial traders fell short of full double entry. Their whole method of business was often lax and careless, so precision in their accounts was hardly to be looked for; moreover, the snail-like pace of transport gave a good excuse for dilatory book-keeping. Few if any professional book-keepers were at hand to help. And traders must have felt it pointless to record matters that they could, thanks to the tiny scale of business, keep under close watch.
PROFIT CALCULATION
There was another—and perhaps a more weighty—reason for not keeping full accounts: a colonial trader was not obliged to calculate , his year’s income in order to please tax officials or stockholders. So he had little need for sales and expense figures; nor was there much point in closing off his ledger at regular yearly intervals.
Some scholars have argued that profit calculation, and therefore double entry, are essential tools of the successful capitalist.[17] Such a theory naturally commends itself to accountants like myself, since it bestows still further prestige upon our craft. Unhappily the book-keeping of the colonial merchant (who was often a remarkably successful capitalist) does not lend colour to this flattering view. He apparently felt that profit figures were not worth their keep. True, he may conceivably have worked out his profit by drafting a single- entry balance sheet; but his failure to rule off ledgers once a year makes even this compromise improbable.
It might, on the other hand, be argued that for an eighteenth- century trader the annual profit of his whole business was not the vital figure—that what he needed to know was the outcome of various lesser enterprises as each reached its end. For, if he was a man of substance, he tended to engage in many short-lived ventures as side- lines to his principal business—perhaps to get rid of commodity-money, and perhaps because there was no stock-market through which to invest his surplus capital. From time to time he might send off a parcel of fish on consignment to his agent in Spain, or fit out a whaler, Or experiment with the making of candles or potash; and he might well keep an account for the consignment, voyage, or manufactory.[18] Such atomised profit-and-loss statements may perhaps be regarded as the eighteenth-century counterpart of today’s cost accounts. Yet even here we cannot be sure that profit calculation was always the motive for keeping the account. When such enterprises were afoot, the trader was apt for safety to join with other men; thus he might at any time hold shares in half a dozen brief partnerships. Or an agent or captain might be mixed up in the affair (e.g., receiving a commission on the proceeds). In such cases profit had to be known—or, at least, a cargo, etc., had to be split up—in order that settlement could take place. In short, personal relations might here again be the chief spur for keeping accounts, not a love for profit figures in the abstract.[19]
One more question poses itself. How would a colonial accountant with a taste for theorising have defined profit? Clearly, there would be small point in his talking about realised gains and losses; debts were apt to turn into pork rather than cash. In such circumstances final "realisation" might take place only if the pork was transferred to the family dinner-table, or if a debtor furnished the trader’s wife with a new bonnet. Nor could the theorist have taken refuge in phrases about matched flows of receipts and expenditure. To measure his profit, the trader would have had to estimate the net appreciation on a host of commodities and unfinished ventures, and appraise the probability that each debtor would pay in some acceptable medium.
This approach might have left a salutary imprint on accounting theory. But the work and mental strain of the calculations would have been a sore burden. The colonists perhaps showed a true sense of economy in declining to measure profit.
PERSONAL ACCOUNTS
From what has been said, it follows that the overwhelming majority of accounts in a colonial ledger are for persons. The degree of care with which they were written up varied greatly; occasionally they are elegant (notably in the books of the wealthier merchants), but often they are slovenly. Many contain wording that strikes the modern reader—used to the drab products of book-keeping machines and their operators—as quaint and pleasing. The narrative rambles over the small incidents of everyday life:
To cash paid in the street,
or (from a kind of cash-book kept by Jefferson) [20]:
Gave in charity...... 3d.
or, on the credit side of an account:
The latter part of May my negro wench scoured at his
house 3 days at 2 per day charged on other side
and, sure enough, the correct debit has been put in.[21]
Once a debt had been created, a quick settlement was hard to accomplish. Payment might consist of a long-drawn-out series of petty instalments. Thus a merchant credits Doctor Greenough with two year’s service ($100), and the doctor then takes driblets of goods from the store, and cash in single dollars.[22]
Accounts often span periods of many years—perhaps with long breaks during which the balance lies fallow. For example, the ledger of an Albany merchant has an account, starting in 1711, that drifts on—with many gaps—ill 1757, when at last his heirs put in a note to say that settlement has been reached.[23] A contemporary writer describes a store’s life as being endless—“ the debts are so small and numerous that it requires posterity to finish a concern.” [24]
Sometimes the two men concerned would meet to scrutinise the details in an account; and then—no doubt after a good deal of debate and head-scratching—the balance would be agreed by both the parties.
A note might be inserted:
He produced his book to me and found the balance due to him £1 10. 10,
or
This I took out of his book.[25]
Then made all accounts even from the beginning of the world to this day
to our satisfaction as witness our hands
In one case, the parties must each have employed an auditor:
Then we the subscribers reckoned and found due from Thos. Cobb Esq.
to Mr. John Adam sixteen shillings and 3d. witness our hands
On behalf of Mr. John Adam, Wm. Crocker.
On behalf of Thos. Cobb Esqr., Joseph Crocker. [27]
In general, traders do not seem to have kept any books of original entry except an omnibus waste and/or journal. But there were exceptions. The records of a Nevis planter include a cash book of 1703; receipts are listed at one end of the book, and payments at the other. [28] Special needs might give rise to other books, e.g., an iron- founder’s papers include a “ time-book.” [29]
By the start of the nineteenth century, cash-books were getting not uncommon. Thus in 1816 a Salem firm had both a cash-book and a sales day-book.[30]
Notes payable in goods
Credit transfers, the historians of early accounting tell us, played an important part in the birth or growth of double entry. They certainly are an outstanding feature in colonial ledgers. Thanks to these transfers, colonies with little cash and no banks contrived to build up a supple system of trade.
Consider a simple transfer, involving three parties. A country storekeeper buys produce from Farmer Giles, and sells it to a city merchant. Neither creditor pays. When next the farmer goes into the city, the storekeeper furnishes him with a letter to the merchant:
John Hancock Esq.
Sir
Please to let Mr. John Moore have Four pounds one shilling lawful money out of your store in such goods as he shall chose on account of your humble servant
Thomas Atkins
On getting the goods, Moore signs the back of the order by way of receipt. Hancock’s clerk methodically docquets it "Thomas Atkins note to John Moore," and debits Atkins “for his note paid John Moore." [31] Presumably Atkins must in his ledger credit Hancock and debit Moore; it is in just such a credit transfer (we may surmise) that double entry had its genesis.
It may be too that these notes to pay in goods—a blend of the modern cheque and the letter to a mail-order firm—can suggest the origin of the bill of exchange. They undoubtedly performed many of the bill’s functions. Thus, by adding "or order" to the wording, the colonists could stretch the cycle of credit transfers:
April 27 1770
John Hancock Esq.
Sir Please to pay out of your store to Captain Adino Paddock or order £13. 6. 8 and etc.
Thomas Dawes
On the back is written
Please to pay the within to Mrs. Mary Hatch
Received the contents
J. Hatch.
In Hancock’s journal, the entry this time runs:
Sundry accounts debtor to Merchandise
Orders often did in fact circulate from hand to hand; they thus provided a private source of paper-money, based on a merchant’s credit and his goods. The resulting journal entries may be somewhat formidable (particularly as they were apt to stray far afield from our textbook precepts):
A and Company dr. to B for their acceptance of a note drawn by C on them in B’s favour and by him indorsed to me. [32]
The beginning of a series of order transactions can be seen in this narrative, written by Brown (of Providence) in his account for Chauncey (of Hadley):
Settled the above account and there is due to balance £108—19—6 which I promise to ship in sugar @ £15 per hundred-weight on account of the said Chauncey to his order in Newport as witness under hand
Obadiah Brown
Josiah Chauncey. [33]
Later debits show that this arrangement was carried out—i.e. Chauncey from time to time sent orders, and Brown met these by issuing sugar.
Variants. Notes payable in money
The procedure varied greatly from case to case. The man who penned such primitive instruments felt himself free to change their wording according to taste and circumstance, and few of them (except those for foreign exchange dealings) fall clearly into the categories now recognised by bill of exchange law; nor had he any prim ideas about such formalities as presentation for acceptance,etc. Sometimes the notes were payable in unspecified goods up to’a given value, sometimes in specified commodity-money at a given rate. Or a note might be payable in cash; when it was met, the drawee would charge the drawer’s account with "cash paid—per your order." Occasionally the note was payable half (or some other fraction) in money and the rest in goods. Even if the note did not state that payment was to be made in goods, the journal may show that goods were in fact the final means of settlement. The drafter seldom bothered to specify any payment time; when he did observe this formality, the order might be payable on demand or at a date as remote as three years later. [34] On occasion, all writing might be dispensed with, and settlement contrived by word of mouth alone— hence entries like:
To Timothy Gilbert’s Verble Order [35]
By the beginning of the nineteenth century some accounts are treating the orders in a more orthodox way, suggesting that the formal bill of exchange has arrived in ordinary trade. The payee of a bill may on occasion be charged with an "advance" that varies with the nearness of the due date (e.g., 84 per cent. if the bill is payable at once, and 6 per cent. if in sixty days).[36]
Promissory Notes
Besides the notes ordering a debtor to pay, the colonists made some use of documents resembling promissory notes.
I promise to pay Benjamin Hand two pounds lawful money. Charge me with the same and you will oblige
July 18, 1787 [38] David Lyman
On occasion, traders managed to effect a settlement by the neat device of book-transfer alone, i.e., no goods or cash changed hands. Here some friendly merchant made a cross-entry in his books on- behalf of the two parties; he thus acted exactly as a modern banker’ who, on receipt of a cheque, credits one customer’s account and debits another.
Such jugglery seems to explain entries like:
To amount of your debt due this day to Anthony Gibbons on bond assumed by me,
and—to square off a long-standing liability for freight and turtles—
The use in notes of phrases such as "please to pay or discount with" suggest the same procedure. "Discount" is here used in its old sense of a set-off to debt:
Sir Please to discount one dollar with Captain Strong if it is convenient and you will much oblige your humble servant Elizah Cornwal
To Colonel David Lyman
Middletown September 2 1800 [40]
Other orders run "please to pay to or discount with ——."
Importance of notes
Credit transfers of one kind or another played a substantial part in colonial trade. Many accounts are freely sprinkled with references to them.
Their number must have been great—e.g., an important merchant like Hancock might well receive several notes in one day from the same customer. Even humble labourers (whose counterparts today would not recognise a bill of exchange in the unlikely event of their seeing one) were adepts at handling such papers; thus the ledger of a trader in Taunton, Mass., has an account for "Gambo Negro," who got advances of cash, rum, and iron; Gambo is then charged with "your order to Philip King, paid to John Adam"; and the account is ruled off when Gambo gives his note of hand for the balance. [41] At the other end of the scale, we find also a municipality using paper to settle for the shovels that it buys. [42]
THE END OF THE SYSTEM
What I have called "colonial accounting" in fact out-lasted the colonial period by many years. The transition to modern methods varied in its speed from case to case. By say 1820, the modern look is beginning to creep in: cash appears more often, debtors can sometimes be distinguished from creditors, and the double-entry structure is less incomplete. Twenty years later the change has become marked; nevertheless colonial traits still crop up in some ledgers.[43]
The date at which a book-keeper switched from £ s. d. to $ was entirely a matter of his own whim. The change was usually made at some point during the fifteen years between 1795 and 1810. The break was not always a clean one; a few accounts might still be kept in the old units after the others had been changed to the new. An inner column was sometimes used for $s and an outer column for the £ equivalents; or the narrative might state the amount in $s, whereas the column translated these figures into the more traditional and respectable units.
We can readily guess what were the factors that put a stop to colonial methods. Growth in population encouraged more specialised trade. The currency was disciplined, and coins were issued in plenty; by the early nineteenth century, a cash account—or even a cash-book—was becoming feasible and useful. Banks appeared in the same period, and with them came bank accounts; the cheque drove out the order payable in pork.
Perhaps these economic factors tell us everything that is needed to explain the change. But I am not quite sure. May not the character of colonial life—for instance, a relaxed tempo in business, and a relish for negotiation—have had something to do with financial methods? Attitudes on such points still vary from place to place. The modem visitor to South Africa (where coins and banks are plentiful enough) is struck by the widespread habit of putting off settlement; shopkeepers politely assume that even well-to-do customers will not pay till the end of the month. In the American colonies, money cannot have been unobtainable always and everywhere. For instance, Massachusetts printed paper money wholesale to finance expeditions against the French; and Rhode Island was even more reckless in her emissions. Ledgers show the results of this inflation clearly—in the sense that prices soared to many times their former level; but, though the provincial notes must presumably have circulated freely and abundantly in those years, there is scant sign of any fall in the volume of barter. We are thus left wondering how far the colonists’ roundabout trade sprang from economic forces, and how far it mirrored a more easygoing way of life.
2. The writers of accounting textbooks deemed it worthy of mention, e.g., John Mair’s Book-keeping Modernized, 6th ed. (Edinburgh, 1793) has a section on "Debtor and Creditor applied in Bartering," p. 28.
3. See, e.g., C. P. Nettels. The Money Supply of the American Colonies (Madison, 1934); A. M. Davies, Currency and Banking in the Province of Massachusetts Bay (New York, 1901); and W. B. Weedon, Economic and Social History of New England, 1620-1789 (Boston, 1890).
4. Frederick Moore, a loyalist émigré whose letter is preserved at the East Pulteney Tavern Vermont.
5. At Yale Library.
6. His ledger (1748-1751) lies in the library of William and Mary College.
7. It would be an interesting task, if one had the skills of a medievalist, to find out whether the same generalisation holds for the earliest examples of book-keeping in Europe. There is a certain plausibility in the notion that the American colonies were, in such matters as currency shortage and lack of specialisation, nearer to the thirteenth than to the twentieth century. And European textbooks of the seventeenth—still more, those of the sixteenth—century suggest that the colonists were faithfully copying the ways of European traders—with a time-lag of a century or so.
8. Strictly, "commodity money” means goods that were acceptable by government in payment of tax. Here I use the phrase to describe goods that were commonly taken and given by merchants to square off debts. For such settlements, the goods were valued at the current market rate; so a journal may show them being "bought" and then "sold" without any profit.
9. Stratton’s ledger (1788-1814), Essex Institute.
10. Harvey’s ledger, in New York Public Library. These entries are as late as 1837.
11. W. T. Baxter, "Daniel Henchman," Essex Institute Historical Collections, LXX (1934).
12. But possibly the sample offered by American libraries is biased. Mair, op. cit., Chap. VII, describes how factors were shipped out from Britain to keep stores in Virginia, and then would send home accounts to their employers in complete double entry. In such cases there would indeed be unusually strong pressure to keep full records. On the other hand, Mair was apparently painting his picture of colonial trade from his study in Perth, Scotland.
13. See, for instance, Ninian Boog’s ledger, 1748-1751 (William and Mary College). This has a few personal accounts with double columns, in some cases headed "tobacco" and "cash," in others "sterling" and "cash." The tobacco and sterling balances may in the end be translated, at suitable rates, into the currency column.
14. Thus an entry in Hancock’s journal may debit cash or merchandise, and credit a person. But the items composing the debits are so odd and varied—sterling bills of exchange, cash collected in London, the cost of hiring a sloop or buying a house—that one suspects the words “cash” and "merchandise" were used ritually when the book-keeper could think of nothing else with which to round off the entry; if cash and merchandise accounts existed, they must have been meaningless hold-alls.
15. James E Hedges, The Browns of Providence Plantation (Cambridge, Mass., 1952), p. 6.
16. The general statements made in this and the next two paragraphs are supported in W. T. Baxter, The House of Hancock, especially in Chaps. XI and XVI.
17. This view is explained and criticised by B. S. Yamey, "Scientific Book-keeping and the Rise of Capitalism," Economic History Review, second series, I (1949), reprinted in W. T. Baxter (ed.), Studies in Accounting.
18. e,g., Jenkins’ day-book, 1747 (Rhode Island Historical Society) mentions accounts for voyages, Fowle’s ledger, c. 1822 (New York Public Library) for consignments inwards, and Ridgeley’s ledger, 1765-1769 (Maryland Historical Society) for shoe- making and a plantation. Apart from these venture accounts, there was not much liking for the many different merchandise accounts featured in contemporary textbooks.
19. But how (it may be asked) were good relations maintained when the main business was run by a permanent partnership? I do not know the answer. Perhaps the partners hoped to straighten matters out with occasional single-entry balance sheets. Perhaps—as the indices of ledgers suggest—such partnerships were rather rare, and tended to be confined to a closely knit family group.
20. Massachusetts Historical Society.
21. Evert Wendell’s ledger (early eighteenth century), New York Historical Society.
22. Ledger of Parker, Aikens, & Co., in Essex Institute.
23. Evert Wendell’s ledger, New York Historical Society.
24. Quoted by Albert J. Voke, in "Accounting Methods of Colonial Merchants in Virginia,” Journal of Accountancy, XLII (1926), p. 5.
25. Both from Evert Wendell’s ledger, New York Historical Society.
26. Peck’s ledger (1793), Yale University.
27. Cobb’s ledger (1766-1784), New York Public Library.
28. Pinney papers, University of Bristol, England.
29. Ridgeley papers, Maryland Historical Society.
30. Parker & Company’s records, at the Essex Institute (which also has one or two other cash-books from different firms).
31. Harvard Business School, Hancock MSS. This collection has also examples of even simpler letters, in which the creditor asks that goods be given to an agent (not to an independent third-party) such as his wife or a ship’s captain.
32. Brown’s Ledger 4 (1740-1752), Rhode Island Historical Society, has entries in this style.
33. Ibid.
34. See Ridgeley’s accounts (mid-eighteenth century), Maryland Historical Society.
35. Cobb’s ledger (1766-1784), New York Public Library.
36. See the books of Lawrason & Fowle (Alexandria, Va.) in the New York Public Library—for instance:
Nov. 14, 1816 Jacob Hoffman dr. to Sundries
Advance 8 1/2 p. ct. 102
37. Wendell’s ledger (entries of 1791-1794), New York Historical Society.See also Pinney’s Ledger 3, at the University of Bristol. In May, 1774, Pinney owes Stanley £232 "for which I gave my [promissory] note payable on demand"; in June, Stanley’s account opens with this credit balance, and is charged with four payments (to third parties) of cash and rum; £106 of "balance due on my note" is carried down to the credit of the next account, which then starts: "By my note for the balance having taken up the above [note] —————- £106."
38. Examples from a packet of documents with the Lyman day book, Yale.
39. Pinney papers (c. 1770), University of Bristol.
40. Lyman MSS., Yale.
41. Cobb’s ledger (1766-1784), New York Public Library.
42. This was the town of Newburyport (see its account in Greenleaf’s ledger, Essex Institute). In 1814 it still paid with a "town order" and bills on third persons.
43. Thus an order in kind is mentioned in 1842 (Barbour’s books, New York Public Library). A ledger from Hanover, N.H., still has the full colonial flavour at its end, in 1834 (E. Miller’s books, in the same library).
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